Is AMERISAFE, Inc. overvalued or undervalued?

As of 11 September 2025, the valuation grade for AMERISAFE, Inc. has moved from very expensive to expensive, indicating a slight improvement in its valuation outlook. Despite this change, the company remains overvalued based on its current metrics. The P/E ratio stands at 20, while the industry average is not provided, and the Price to Book Value is 3.57. Additionally, the EV to EBITDA ratio is extremely high at 796.88, suggesting that the company's earnings are not being valued favorably in comparison to its enterprise value.
In terms of peer comparison, AMERISAFE's P/E ratio of 20 is higher than that of Mercury General Corp., which has a P/E of 11.03, indicating that AMERISAFE is priced at a premium relative to some of its peers. Furthermore, The Hanover Insurance Group, Inc. has a fair valuation with a P/E of 19.44, which is still lower than AMERISAFE's current valuation. The stock has underperformed significantly against the S&P 500, with a year-to-date return of -13.25% compared to the index's gain of 12.22%, reinforcing the notion that AMERISAFE is overvalued in the current market environment.